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Diamond’s Rates Are Set Keeping Customers’ Economic Condition In View

2007: Diamond’s Rates Are Set Keeping Diamond Size In View

February 2007

In the Democratic response to the State of the Union, Senator Jim Webb (D-VA) noted the gap between rich and poor is growing, and that the average corporation head now makes some 400 times the average worker for a corporation. That is also the opinion of Barrons in their recent article "Rich America, Poor America."

"Never in history have the haves had so much," Barrons said, noting that in the U.S., the richest 1% of American have net worth 190 times that of the media household, up sharply from 131 twenty years ago.

"It’s getting to the point where "millionaire" will no longer serve as a useful shorthand for defining who’s rich," the newspaper said.

Because of this disparity, the newspaper’s stock pickers are recommending companies that specialize in upscale goods. Among the names they recommended that are familiar to DRB readers: Tiffany, Sotheby’s, Bulgari, and LVMH (co-owner of the De Beers store)

This disparity between rich and poor demonstrates what the Diamond Registry has found over the last few years in the diamond market: The low and high ends are the strongest.

In particular, the price of better quality, bigger stones has risen over the last few years (see next article). However, the market for "bread and butter" goods, consumed by the middle class, is soft, and prices have fallen in certain categories. Meanwhile, low end goods are strong and the market is fueled by healthy demand.

No matter how you feel about this disparity, it is worth noting that the jewelry market is well positioned to take advantage of this growing gulf — if we keep focusing on the luxury and specialness of the product—and not sell our product simply as a commodity.


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